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Secret documents discovered by Sverige Radio have revealed that the Swedish government has been working with Saudi Arabia to build an advanced weapons factory in the country.

The radio station says the documents show that Sweden's Swedish Defence Research Agency (Totalförsvarets forskningsinstitut, FOI) has been working on the multi-billion dollar project since 2007.

While FOI head Jan Olof denied the reports to Sverige Radio, documents appear to show that FOI-formed a company, Swedish Security Technology and Innovation (SSTI), to deal with the Saudi's in the face of government hesitation.

Multiple human rights agencies and opposition figures in Sweden have criticized the deal, the Local reports.

Despite its strong ties to the West, Saudi Arabia has been described as a theocratic dictatorship. The United States and Sweden have both sold arms to it before, but this new scandal is seen as particularly galling as it is developing Saudi Arabia's homegrown defense industry.